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Private insurance companies to celebrate their 20th business anniversary in Estonia

December 30, 2010

The end of 2010 marked the 20th anniversary of the foundation of the first private insurance companies next to the Soviet state insurance. In late 1990, two private insurance companies, the predecessors of the present-day ERGO Insurance were set up: Leks Kindlustuse AS and Balti Kindlustusselts AS (BICO). In 2011, ERGO is going to celebrate its 20th business anniversary in Estonia.
According to Sergei Vahnitski, member of ERGO’s Management Board, privately-owned insurance companies had to work really hard to prove their reliability and viability alongside the then state insurance monopoly. “Twenty years ago, a private insurance company looked like a club of enthusiasts in comparison with the state monopoly and was not taken seriously by many people. However, time has proved that the then enthusiasm has come to something. Private capital has made a big change to Estonia's insurance market by widening the choices and improving the quality of services," Sergei Vahnitski stated.

While today the insurance market is dominated by vehicle insurance, including motor third party liability insurance, in the first years of their operation, private insurance companies were first and foremost interested in property insurance. The licence issued to ERGO’s legal predecessor BICO in late 1990 shows that the company offered accident insurance, sickness insurance, land and air insurance, fire, flood and natural forces insurance, property insurance as well as general liability insurance and carrier and carrier liability insurance. BICO issued its first policy on 30 December 1990. The company paid out its first indemnity in May in the amount of 1,905 roubles to compensate the damage caused by a traffic accident.

The first branch offices outside of Tallinn were set up by ERGO’s legal predecessor BICO in Tartu and Pärnu. In 1992, the company expanded to other Baltic countries and operates today in Latvia, Lithuania and Belarus.

BICO raised foreign capital in 1995, when its non-life insurance was acquired by Alte Leipziger Europe BmbH and life insurance by Munich Re, one of the largest reinsurance companies in the world.

In 2000, the two legal predecessors of ERGO, Leks Kindlustuse AS and Balti Kindlustusselts AS were merged. The change of ownership in 2001 led to the introduction of a new company name and trademark – ERGO.

Today, ERGO is one of the leading non-life insurance companies in Estonia and provides complete property and life insurance solutions to private and corporate clients as well as pension solutions. ERGO has 140,000 clients in Estonia and is the second largest company on the country’s non-life insurance market. In the Baltics, ERGO operates on the Latvian and Lithuanian life, health and non-life insurance markets and Estonia’s and Lithuania’s pension fund markets as well as on the non-life insurance market in Belarus. Close to 400,000 customers in the Baltic countries trust ERGO’s services, expertise and financial stability. ERGO companies in Estonia and other Baltic countries belong to the ERGO Insurance Group, which has almost 40 million clients in more than 30 countries. The owner of ERGO Insurance Group is Munich Re, one of the leading reinsurance groups in the world.